First Quarter Paid Search Spend Grows, though Mobile Is Mellowing

Between both Year-over-Year (YoY) and Quarter-over-Quarter, spending on search advertising rose in the first quarter of 2014, according to a report from IgnitionOne, a company that generates paid search for advertising agencies and major brands. The total increase is 8 percent, with YoY click-through rates seeing the biggest gains at 23 percent, while paid search clicks increased by 5 percent. Although impressions fell by 15 percent, this is due to the rise in mobile searches, which has less ad space to offer.

In three primary control industries, Travel saw the greatest increase in YoY spending at 15 percent, with Retail and Automotive following at 8 percent and 4 percent, respectively. Impression metrics declined across the board, with Google the lone exception, which saw a 10 percent rise in the retail sector. The improved eCPM numbers in Travel and Automotive are due to their increased CTRs. The report also notes that mobile ad spends continue to grow, but not at the phenomenal rate of recent years, with smartphone increasing by 107 percent, and tablet spends up by 79 percent.

The President of IgnitionOne, Roger Barnette, attributes this slowdown to “increases in efficiencies, especially within the Yahoo!/Bing network, where marketers have ability to control and optimize their mobile advertising to a greater degree.” Of particular interest is IgnitionOne’s attributing the increased spending for paid search on smartphones (42 percent) to the greater efficiencies found on the Yahoo!/Bing network, as it still allows device targeting. Yahoo/Bing has also seen a slight increase in its first quarter search market share, up two-tenths of a percent at 22.9. Google still dominates in this sector at just over 77 percent.

Sources:

Marvin, Ginny. “Search Spend Rises 8 Percent in Q1, Mobile Shows Signs of Maturing [Report]”; Search Engine Land. March 31, 2014.